Ucb Cvp Analysis

1.0 How do the formats of the income statements shown on pages 33 and 50 of Benetton’s annual report differ from one another (disregard everything beneath the line titled “income from operations”)? Which expenses shown on page 50 appear to have been reclassified as variable selling costs on page 33?

A. The income statement shown on page 33 exclusively shows the contribution margin. This format is used for internal company analysis. Benetton has chosen to show it as a part of annual report. The variable costs (Distribution and Transport costs, Sales commission) are clubbed together. This format is called the contribution format.
The income statement on page 50 shows the variable costs and fixed costs more clearly. It has broken down the…show more content…

This figure exceeds the decrease in break even sales from 2003 to 2204 of 114 ((in million €)
6.0 Operating Leverage for 2004

Operating Leverage = Contribution Margin / Income from operations
Hence, Operating Leverage = 653/217 = 3 This means an x% increase in sales will make the profit increase by 3x% A 6% increase in sales will increase the income by “operating leverage” times - which is 18% 2004
Income from operations (in million €) 217
Percentage increase 1.18
Projected income from operations (in million €) 256.06

7.0 What income from operations would Benetton have earned in 2004 if it had invested 10 million additional euros in advertising and promotions and realized a 3% increase in sales? As an alternative, what income from operations would Benetton have earned if it not only invested 10 million additional euros in advertising and promotions but also raised its sales commission rate to 6% of sales, thereby generating a 5% increase in sales? Which of these two scenarios would have been preferable for Benetton?

1) A 3% increase in sales and 10 million euros increase in fixed expenses:
The CM ratio is 0.387. It remains constant because there is no change in the variable costs.

1. Accounting Analysis
Assess the degree to which the firm’s accounting reflects the underlying business reality. Identify accounting distortions and evaluate their impact on profits and the sustainability of profits.
Financial statements are used to determine the business activities of a firm and the role of accounting analysis is to determine the accuracy and quality of the information provided. This analysis would look into the degree of its accounting figures captures its business reality….

Financial Ratios: What They MeanIn assessing the significance of various financial data, managers often engage in ratio analysis, the process of determining and evaluating financial ratios. A financial ratio is a relationship that indicates something about a company's activities, such as the ratio between the company's current assets and current liabilities or between its accounts receivable and its annual sales. The basic source for these ratios is the company's financial statements that contain….

CASE NO.1
I. PAMPANGA CEMENT CORPORATION
The government had been pushing the Pampanga cement corporation to switch their product into coal.
II. SWOT ANALYSIS:
Strength:
* Can borrow money to bank (DBP/PNB)
* Long term experience in business industry
Weakness:
* Rivalry in the executive position
* Conflict with the employee
* Financial problem
Opportunities:
* borrow money from banks
* leader of labor union is compadre of atty. Alcantara
Threats:
* the labor union….

Fashion Observation Analysis
1. Go to a public place and OBSERVE the community of people in that place for at least 30 minutes; perhaps as long as 60 minutes. In your report, describe the setting and note the date and time of your observation. Describe the element of “community” that you observed.
The public place, in which I chose to observe fashion, was a community fall festival. This festival occurs once a year and brings people from several communities. I arrived at the festival in….

Journal Article Analysis
University of Phoenix
Douglas Gurney, MBA
Constructing Meaning PHL717
December 17, 2012
Dr. Kathy Kelly
Journal Article Analysis
Current views of the world, desires, dreams, goals, and the demands placed upon society are constantly transformed by present epistemological beliefs. Schommer-Aikens and Hutter (2002) investigated the relationship between an individuals’ belief about knowledge, learning or epistemological beliefs and how this relates to average conversational….

exceeded GM total sales (Theguardian Inc, 2011). The aims of this paper is to analyze how Toyota keeps its sustainable competitive advantages by applying different strategies and try to find out what potential threats behind its brilliant success. The analysis is based on the Dunning’s Eclectic (OLI) paradigm, which including three specific perspectives of ownership, internalization and locational advantages.
2. Ownership advantages
2.1 Toyota Production System (TPS) and Just-In-Time (JIT) management….